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Low MSP for cotton may ruin many Maharashtra farmers -Aparna Pallavi
-Down to Earth

Untimely rains have damaged cotton and soyabean crops all over the state

As if prevailing drought-like situation and other natural calamities in 2014 were not enough, the low procurement prices for cotton produced in the state are set to destroy the agricultural economy of the state.

The state government has started cotton procurement for the season at the dismal minimum support price (MSP) of Rs 4,050 per quintal. This, allegedly, is way short of the cultivation cost. With production of cotton down by almost 50 per cent due to drought-like condition, the price for lower grade cotton set at Rs 3,950 and Rs 3900 will ruin lives of many farmers.

The Maharashtra State Cotton Growers Marketing Federation has admitted that the MSP is totally unfeasible. "The cost of production this year has hit as much as Rs 5,500 per quintal due to low production," says federation chairman N P Hirani while speaking to DTE. "As compared to a normal yield of four to five quintals per 0.40 hectare every year, the production in Vidarbha and Marathwada regions of Maharashtra this year is just 1 to 1.5 quintals," he adds.

The Federation, in its annual general meeting (AGM) in September 2014 has passed a resolution asking for Rs 6,000 MSP. "We have asked the government to either raise the MSP or to provide additional subsidy to farmers," he says.

Low demand and global surplus add to farmers' woes

According to Hirani, the low MSP is a result of huge surpluses building up in the national and international markets. "This year's global production is 26 million bales whereas utilisation is expected to be around 24 million bales. Moreover, there is already a surplus of 20 million bales since 2011, which takes the surplus to 22 million bales," he explains. The federation chairman also explains that the slump in the economy has brought the consumption of cotton garments down in Europe, which is the main reason behind the surplus.

The situation in India is no better. "There is already a surplus of 34 lakh bales since last year. With an expected production of 450 lakh bales this year, a similar surplus is expected to build up as domestic consumption stands about 300 lakh bales," he adds. Moreover, there is a 30 to 40 per cent drop in exports from China, the most important procurer of Indian cotton. According to Hirani, the price in the open market is likely to be even lower than the MSP. This means that farmers now have fewer options than ever as the government has not yet responded to Federation's resolution.

Farmers, meanwhile, are in a quandary as losses are expected to be colossal. "This year, soybean too has failed to yield," says farmer Anil Patil of village Aurangpur in Buldhana district of Maharashtra. "Against an expected yield of 25-30 quintals per hectare, our area has received yields of no more than 2.5 to 4 quintals," Patil says. He further adds that he does not see a chance of recovering even 50 per cent of Rs 1 lakh that he has spent on his 3.20 hectare farm.

Patil says now many farmers fear that the drought may have brought down the quality of their cotton fibre, which would mean a further slump in earnings.